What Women Want
A survey undertaken in the USA in 2010 by Ameriprise, a financial services company, found some interesting differences between men and women when it comes to getting financial advice. To begin with, women are much more likely to seek financial advice than men (46% vs 38%). When asked about the importance of specific attributes of advice, there were clear differences between men and women. Women place a much higher importance on having an adviser who takes time to educate them, with 63% rating this attribute as extremely or very important compared with 52% of men. They also seek an adviser who provides a knowledgeable point of view (69% for women vs 52% for men) and who coaches them on what they need to do to achieve their retirement goals (58% vs 43%).
During their pre-retirement years, more women than men put high importance on planning to be able to volunteer (31% vs 22%) and spend time with family (77% vs 68%) in retirement. These differences continue through to how they spend their time in retirement. Men, on the other hand, place more importance while in their pre-retirement years on planning how to spend more time resting and relaxing (38% vs 32%) and deciding on hobbies to pursue (33%vs 21%), yet in retirement they are much more likely to continue to work (17% vs 6%).
One of the most surprising findings of the survey is that both women and men give almost equal importance to an adviser’s ability to understand what is important to them as to the adviser’s ability to produce competitive returns on their money.
In summary, while women tend to have more concerns about their financial future, they are also more likely to use a financial adviser and to make plans for an active lifestyle in retirement.
Be Credit Card Smart
Credit cards are both a convenient way to pay for purchases and a trap for those who are easily tempted by access to credit. Being smart with your use of credit cards can help you manage your money better and avoid getting into too much debt. These simple tips are all you need to be credit card smart:
- Set your credit limit at a level you can afford to repay within the interest free period.
- Know the due date of your payment and pay on time.
- Always pay more than the minimum due on your credit card to help reduce your balance and your interest charges.
- Avoid interest charges altogether by paying your credit card balance in full each month, preferably by direct debit from your bank account.
- Use online services to keep track of your card spending so you can keep within your limit.
- Avoid taking cash advances or paying utility bills with your card as they usually incur additional fees.
- Regularly review your monthly statements to ensure that there are no errors or unauthorised charges on your account.
- Use your card only for essential purchases and not for luxuries.
Consider having two cards – one with a low limit for everyday purchases which you pay off in full each month and another for emergency or large purchases. It pays to shop around for the right type of card for you with a fee structure that suits your needs. For example, some low interest rate cards have higher monthly fees and are more suitable for those with high credit balances. If you need a card only to make online or telephone purchases, consider using a debit card. Your bank account will be debited straight away and you will therefore pay no interest.
Make More Money
It’s all very well trying to save by spending less than you earn, but sometimes the costs of living and bringing up a family mean there simply isn’t any spare cash. In that case, to get ahead you need to increase your income. Here are some ideas for how to make more money.
Firstly, make sure you are being paid enough for the work you are doing now. If you are in business, can you increase your prices? If you are an employee, research other jobs in your field to see if you are being paid the market rate. Now look at your skill set. People with expertise in areas where there is a big demand get paid more. Is there a special skill you have that you could develop further through training and experience so you become an expert? Alternatively, could you broaden your expertise by developing new skills?
Developing your network of contacts is a good way to find opportunities for career advancement. It is easy to do this on line, for example through networks such as Linked In, Plaxo and Facebook. Let people know what it is you are good at.
One of the easiest ways to make more money is to set up a business you can run from home in your spare time. The internet is full of opportunities to make money and even better, it is a huge global marketplace. If you are running a business at home, you may be able to reduce your tax bill by claiming legitimate expenses such as office, telephone and computer costs. If you are not sure what you can sell yourself, then consider opportunities to make money by becoming an affiliate of someone who is in business and being paid for customer referrals you give them.
Get Rid of Debt
Starting the New Year with a pile of debt is not a good situation to be in, but it is a common problem. If you are serious about getting ahead financially, then getting rid of debt should be one of your top priorities. Here are five steps that will help you get rid of debt faster:
Step One – Don’t add to the debts you already have. Debt arises when you spend more than you earn. You can avoid adding to your debts by living within your means.
Step Two – Confront your debts by making a list of them. If you have many small debts you might be surprised at what they add up to. Rank your debts in order of priority for payment. Some people prefer to pay off the debts with the highest interest rate first, and some prefer to start by getting rid of the debts that have the shortest repayment period so they feel like they are making progress.
Step Three – Check on any penalties or fees for early repayment. Contact each lender to determine how quickly you can repay your debt without incurring penalties or fees.
Step Four – Consolidate and/or refinance. Look at options for consolidating your debt and/or refinancing it at a lower interest rate than you are currently paying. If you are struggling to keep up with payments, this may also allow you to repay debts over a slightly longer period of time to make the payments more manageable.
Step Five – Set up an automatic payment to make additional voluntary payments on the first debt on your list. Leave your other debt payments at their minimum level. When the first debt is paid off, start on the next one on the list and keep working through until all debts are repaid.
Five New Year’s Resolutions
Regardless of whether your financial goal is to create enough wealth for financial security or a multi-million dollar empire, the starting point is the same. Fortunes are only made on a solid financial base and to build one means getting rid of some old money habits and developing some new ones. Here are five resolutions that will help you build wealth in 2011:
Spend less than you earn
Spending more than you earn will use up your savings or take you into debt. Spend less than you earn and you will save. It’s a principle that is simple to understand but very hard to do. Get it right, throw in some compound interest on your savings, and you will add to your wealth effortlessly.
Make the most of KiwiSaver
If you haven’t joined KiwiSaver make it one of the first things you do this year. It’s an easy way to double or even triple your money. If you are already a member, get advice on whether your money is being invested in a fund that is appropriate for your needs.
Set up an emergency fund
Life is full of unexpected surprises, some of which can be expensive. Having money on hand will help you stay out of debt, particularly expensive debt such as credit card debt.
Pay off debt
Just as compound interest on savings helps make your wealth grow more quickly, interest on debt will destroy wealth and debt repayments will make it more difficult to spend less than you earn.
Review your life and income protection insurance
Protecting your wealth is just as important as creating it. The death of a life partner or the loss of your or your partner’s income through health problems can see your life savings quickly disappear and your standard of living fall.
